Democrats Gone Wild Again

“Egalitarians create the most dangerous inequality of all — inequality of power. Allowing politicians to determine what all other human beings will be allowed to earn is one of the most reckless gambles imaginable. Like the income tax, it may start off being applied only to the rich but it will inevitably reach us all.”

Thomas Sowell

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From The Washington Examiner:

A bill to let Big Government set your salary

It was nearly two weeks ago that the House of Representatives, acting in a near-frenzy after the disclosure of bonuses paid to executives of AIG, passed a bill that would impose a 90 percent retroactive tax on those bonuses. Despite the overwhelming 328-93 vote, support for the measure began to collapse almost immediately. Within days, the Obama White House backed away from it, as did the Senate Democratic leadership. The bill stalled, and the populist storm that spawned it seemed to pass.

But now, in a little-noticed move, the House Financial Services Committee, led by chairman Barney Frank, has approved a measure that would, in some key ways, go beyond the most draconian features of the original AIG bill. The new legislation, the “Pay for Performance Act of 2009,” would impose government controls on the pay of all employees — not just top executives — of companies that have received a capital investment from the U.S. government. It would, like the tax measure, be retroactive, changing the terms of compensation agreements already in place. And it would give Treasury Secretary Timothy Geithner extraordinary power to determine the pay of thousands of employees of American companies.

Democrats Gone Wild

On Tuesday, Obama’s teleprompter said that Obama’s budget will move America “from an era of borrow and spend” to “save and invest” by borrowing and spending like nothing ever seen before in the history of the planet.

The only question now is will the Democrats in Congress even read it before they pass it.

From The Washington Post:

Projected Deficit
In the first independent analysis, the nonpartisan Congressional Budget Office concluded that President Obama’s budget would rack up massive deficits even after the economy recovers, forcing the nation to borrow nearly $9.3 trillion over the next decade.

Krauthammer, yet again, spot on

From Charles Krauthammer:

That’s $165 million in bonus money handed out to AIG debt manipulators who may be the only ones who know how to defuse the bomb they themselves built. Now, in the scheme of things, $165 million is a rounding error. It amounts to less than 1/18,500 of the $3.1 trillion federal budget. It’s less than one-tenth of 1 percent of the bailout money given to AIG alone. If Bill Gates were to pay these AIG bonuses every year for the next 100 years, he’d still be left with more than half his personal fortune.

Entire essay here

Ozbama off the prompter

From The Christian Science Monitor:

But today, President Obama took that rhetoric in a different direction. He actually upped the ante explaining that AIG is like a suicide bomber.

“We had to step in, it was the right thing to do, even though it is infuriating,” Obama said, explaining why the government needed to bail out the troubled banks.

“The same is true with AIG,” he said. “It was the right thing to do to step in. Here’s the problem. It’s almost like they’ve got — they’ve got a bomb strapped to them and they’ve got their hand on the trigger. You don’t want them to blow up. But you’ve got to kind of talk them, ease that finger off the trigger.”

The Great and Powerful Ozbama

This guy’s sole talent is his ability to project a grand facade from words on a teleprompter.

From Sky News:

Irish Prime Minister Brian Cowen was just a few paragraphs into an address in Washington when he realised it all sounded a bit too familiar.
It was. He was repeating the speech President Barack Obama had just read from the same teleprompter.

Mr Cowen stopped, turned to the president and said: “That’s your speech.”
A laughing Mr Obama returned to the podium to take over but it seems the script had finally been switched and the US president ended up thanking himself for inviting everyone to the party.

Fannie Mae Bonuses

Granted the following bonuses were paid before the collapse of Fannie Mae, but shouldn’t there have been at least a little righteous indignation coming from the hacks in Washington over this?

From Byron York at National Review:

Even though his salary never topped $1 million, [Franklin] Raines’s total compensation shot from $6.48 million in 1998 to $8.52 million in 1999, to $13.89 million in 2000, to $18.86 million in 2001, to $18.20 million in 2002, to $24.15 million in 2003, all on the strength of EPS [earnings per share] bonuses. Investigators found that of the $90.12 million Raines was paid in that six-year period, more than $52 million came from EPS bonuses.

[Jamie] Gorelick’s situation was similar. OFHEO found that she took home $26.46 million in the period from 1998 to 2002 (she left in that year, so she wasn’t there for the entire period under investigation). Of that figure, nearly $15 million came from EPS bonuses.

AIG Bonuses

Some good points from Ed Morrissey at Hot Air regarding the AIG bonuses:

The nasty little secret at the center of all the outrage is that the Obama administration could have stopped the bonuses by simply stopping the bailout. They could have forced AIG into bankruptcy, which would have voided the company’s contractual compensation obligations. Instead, the Obama administration chose to inject liquidity into AIG, following the lead of the Bush administration, which had done the same thing. That kept AIG’s doors open, and therefore kept its contractual obligations to its employees intact.

Now Obama is outrageously outraged, as Allahpundit put it yesterday, but over what? A company complying with its contractual obligations? AIG has no more right to abrogate those contracts than any other employer would with its union contracts. Whether or not the compensation agreements reflect wisdom and managerial brilliance, they exist — and as a matter of law, AIG has to honor the commitments. Screeching about the bonuses now is not just futile, but a demonstration of the arrogance involved in these bailouts. If the government wants to tear up all the contracts, it will have to nationalize AIG and get Congress to approve it.

In the future, we can avoid having taxpayer dollars go to Wall Street bonuses by not bailing out private companies with taxpayer dollars.

Update: Not to be reported by ABC, CBS, NBC, and CNN – the AIG bonuses were protected in the stimulus bill.

From David Freddoso at National Review:

But why is Obama so outraged and surprised? Today we learn that he signed the very bill that quite clearly made those bonuses legal — the $787 billion stimulus package he had traveled around the nation promoting. The bill includes restrictions on executive compensation, but creates an exception for bonuses contractually obligated before February 11 of this year. The provision, and the exception, were inserted into the bill by the chairman of the Senate Banking Committee, Chris Dodd (D, Conn.), who has received more than $100,000 from AIG employees in the last 20 years, had written and inserted the relevant provision, with the relevant loophole. How can he, the president, or anyone else who voted for the stimulus, suddenly act surprised? Don’t tell us they didn’t read the bill.

House Republicans are already calling for a return of the money, and holding a press conference. Here is the statement from House Minority Whip Eric Cantor (R, Va.) from this afternoon.

“Today, news reports reveal that a last minute provision in the stimulus bill inserted by Democrats protected bonuses like those received by AIG executives. Taxpayers deserve better than this from their government, and this is just the latest reason why legislation must be transparent for all Americans to see before it is recklessly signed into law.”

UPDATE: Here is the loophole, from the section of the stimulus package that deals with compensation rules for TARP recipients:

“The prohibition required under clause (i) shall not be construed to prohibit any bonus payment required to be paid pursuant to a written employment contract executed on or before February 11, 2009, as such valid employment contracts are determined by the Secretary or the designee of the Secretary.”

Frankly, it’s hard to imagine how the government could prevent such contracts from being honored. But the presence of this loophole, in black and white, certainly gives the lie to all of this phony outrage — by the senator who created the loophole, by the president who signed it into law, and by everyone else who voted for the stimulus package.